The London Times reported this week that the European aircraft manufacturer Airbus is under investigation by the U.K. Serious Fraud Office (SFO) for allegations of bribery and corruption in passenger plane sales. This new investigation comes on the heels of reports earlier this year that the company was negotiating with the SFO for failing to inform authorities of the use of certain third-party agent’s sales. Those sales were backed by the U.K. government’s export financing agency, U.K. Export Finance, which is similar to the U.S. Export-Import Bank. This new investigation expands on those initial disclosures by Airbus to the SFO.
An interesting factor in this matter is the spectre of U.K. government oversight in the loan guarantees. It was not clear from the article if there were loan covenants around anti-bribery compliance programs and the use of third parties. Such covenants, however, are becoming more commonplace in the non-government financing world. Matt Ellis, a member at Miller & Chevalier and well-known anti-corruption expert who specializes in representing Latin American clients, told The Man from FCPA that U.S. private equity companies looking to invest or provide funds to Latin American companies often want to know specifically about those companies’ compliance programs. Interestingly, banks are now often requiring borrowers to have a best practices compliance program in place and keep it in place during the pendency of the loan. Such obligations are memorialized in the loan covenants.
